Corporate sustainability, context and performance: An empirical examination of the Indian hotel industry

Abstract

Corporate sustainability has been of prime interest to many industries including the travel and tourism industry as it shares a bidirectional relationship with the society and the environment. Taking this into account, this study aims to contribute to the literature by examining drivers of corporate sustainability in the Indian hospitality industry from two different perspectives, namely environmental perspective and organizational perspective. As the Indian travel and tourism industry ranks in the bottom 20%-40% on health and hygiene and environment sustainability, the setting of this study, India, holds particular importance. A three-stage mixed-methods research design was utilized that comprised: 1) conducting semi-structured interviews with four academic scholars and five industry experts, 2) analyzing 200 surveys, and 3) carrying out five in-depth interviews with hotel managers from 4- and 5- star hotels in India. Given that performance management research in the hospitality industry remains stagnant despite the prevalence of multi-dimensional performance metrics, this study also contributes to the hospitality industry and sustainability literature through developing a semi-hierarchical sustainability balanced scorecard (SBSC) scale. Consequently, a refined SBSC scale comprising six perspectives that include 21 indicators is developed. In light of the COVID-19 pandemic, and through conducting a iv post-hoc analysis, a new health and safety perspective is also proposed that explores a road to recovery by stressing the health and well-being of both employees and tourists. Furthermore, in order to contribute towards resolving the escalating ambiguity of the sustainability-performance relationship, the study looks at the overall organizational performance, including financial and non-financial perspectives, which is only explored in a limited way in the sustainability-performance literature. The findings of this research lend support to the belief that corporate sustainability has a positive impact on organizational performance. It also indicatesthat, in situations of high levels of competitive intensity, presence of slack resources, and top management commitment to sustainability, having a sustainability strategy improves the overall performance of hotels. Surprisingly, environmental munificence did not significantly influence corporate sustainability; however, it directly improved organizational performance. Practical implications including the use of the SBSC for performance assessment and ways to improve corporate sustainability in hotels amongst others are highlighted. The study also enlists various avenues for future research that incorporate research opportunities relating to improving the understanding and practice of balanced scorecard along with building up knowledge on emerging research topics like sustainable tourism and new tourism management.